Inositol 1,4,5‐trisphosphate receptors (InsP₃Rs) were recently demonstrated to be activated independently of InsP₃ by a family of calmodulin (CaM)‐like neuronal Ca²⁺‐binding proteins (CaBPs). We investigated the interaction of both naturally occurring long and short CaBP1 isoforms with InsP₃Rs, and their functional effects on InsP₃R‐evoked Ca²⁺ signals. Using several experimental paradigms, including transient expression in COS cells, acute injection of recombinant protein into Xenopus oocytes and ⁴⁵Ca²⁺ flux from permeabilised COS cells, we demonstrated that CaBPs decrease the sensitivity of InsP₃‐induced Ca²⁺ release (IICR). In addition, we found a Ca²⁺‐independent interaction between CaBP1 and the NH₂‐terminal 159 amino acids of the type 1 InsP₃R. This interaction resulted in decreased InsP₃ binding to the receptor reminiscent of that observed for CaM. Unlike CaM, however, CaBPs do not inhibit ryanodine receptors, have a higher affinity for InsP₃Rs and more potently inhibited IICR. We also show that phosphorylation of CaBP1 at a casein kinase 2 consensus site regulates its inhibition of IICR. Our data suggest that CaBPs are endogenous regulators of InsP₃Rs tuning the sensitivity of cells to InsP₃.